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SBJ/April 18-24, 2011/Media
ESPN, Big East in talks on extension
Published April 18, 2011, Page 1
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A deal is not imminent and could take months to complete, if at all, partly because the Big East schools aren’t on the same page in terms of strategy, sources said. But initial indications show the current trend of escalating rights fees will continue, as the extension being discussed would more than triple the conference’s current media rights fee.
ESPN and the Big East are taking an aggressive posture in extending their nearly 32-year relationship by initiating these talks much earlier than normal. Typically, with a deal expiring at the end of 2013, talks wouldn’t have started until next year.
ESPN currently pays the Big East an average of $36 million annually as part of a six-year contract for all of its sports. While initial numbers being floated may not be as rich as the ESPN/ACC deal that was struck last spring, it would still mark a major boost for the 16-team conference.
Sources indicate the early numbers range from $110 million to $130 million annually, but conference sources describe those figures as a starting point for any negotiation. The initial offer would fall short of the $155 million annual payout the ACC will receive from ESPN in a deal that kicks in this summer. But the bold push by ESPN shows the network wants to lock down college rights in the face of increasing competition.
Despite the long history between the conference and the network — they’ve been partners since 1979 — several obstacles have to be cleared before any extension can be finalized.
ESPN’s offer has created a division among the conference’s schools. Some want to rebuff ESPN’s offer and take the conference’s media rights to the open market. The reason: The amount of potential bidders in the market has helped other leagues increase their media rights more than they initially expected.
During ESPN’s negotiations for the ACC rights last year, the network’s bid leaped from about $120 million to more than $155 million per year once Fox emerged as a legitimate contender.
Just last week, the Big 12 verified that Fox intends to be a significant player in the college rights space with its 13-year, $90 million per year deal that more than quadrupled the $20 million the conference was getting in its previous cable arrangement.
Earlier this year, Fox Sports agreed to pay Conference USA a total of $42 million for its rights over five years.
And the Pac-10, which is deep into negotiations on the open market with Fox, ESPN, Turner and Comcast/NBC, has talked about signing an all-in media rights deal worth north of $200 million per year.
Still, ESPN’s initial offer has support among several other Big East schools, who are looking for ways to increase revenue and secure their futures in a league that seems annually to be the target of poachers from other conferences.
The 16 Big East schools — soon to be 17 when TCU joins — have to share the $36 million the conference gets annually from ESPN. A new ESPN deal would reset that market, making the Big East more competitive with other conferences and potentially convincing schools with bigger football programs — like Syracuse and Pittsburgh — to stay with the conference.
As the talks unfold, sources say, all eyes will be on Big East Commissioner John Marinatto, who succeeded Mike Tranghese in 2009 and embarks on his first major media negotiation.
The draw for the Big East traditionally has been its strength in basketball. The league sent 11 teams to the NCAA tournament this past season and its ninth-place squad, UConn, wound up winning the national championship. Football, on the other hand, has been a drag on the conference.